A review of things you need to know before you go home on Friday; a rate change, building consents jump, CPI updated, ANZ gives up on selling UDC to HNA, swap rates slip, NZD holds

TERM DEPOSIT RATE CHANGES
Asset Finance has tweaked rates for 18 months and 4 years down a bit.

INTENSIFICATION BOOSTBuilding consents rose strongly in November, hitting a 13-year high nationally, a 15-year high in Auckland. Apartments and townhouses drove the spike. But there are reasons to think that many are getting in before the huge distortions (capacity, costs) that will inevitably come when KiwiBuild ramps up, starving others of capability.

CPI UPDATE
Stats NZ has updated the components to the quarterly consumer prices index survey. These latest changes reflect updated spending patterns bringing in more of the sharing economy and food choices, dropping out redundant technology items. Food and housing components make up more than 40% of the CPI basket

GROWTH IN OTHER CONSTRUCTION STRONG TOO
The value of non-residential building consents were up a strong +10.5% in the year to November although the floor area was up less than +7%. That was probably due to the strong level of Government buildings for education and health. Overall, Auckland projects buoyed these numbers, observed Infometrics.

ORPHAN STATEMENT
ANZ today confirmed what everyone already know; the are not selling UDC to HNA and their agreement to do so has lapsed. Given they have signaled they don’t want it, they say “we’ll continue to assess our strategic options regarding the future of UDC, although there is no immediate requirement to do anything.”

IN TRANSITION
China may run trade deficits in the next five to 10 years. Zhang Yansheng told a conference in Hong Kong that China could no longer rely on exports to expand its economy as it had done over the past 30 years, because it was unsustainable and would put too much strain on ties with the rest of the world, especially as protectionism grew. “The next stage is an open economy that focuses on a balance of trade,” he said. “Expanding imports is a very significant part of China becoming a big global power.” Zhang is a former Beijing economic heavyweight.

WHOLESALE RATES SOFT
Swap rates slipped today across the board by -1 bp. The 90 day bank bill rate is unchanged at 1.87%. In China, their sovereign 10yr yield is up to 3.96% (+1 bp). The NZ Govt 10yr yield is unchanged today at 2.87%.

NZ DOLLAR HOLDS HIGHER
The NZ dollar has held on to its ½c overnight gain today and is now at 71.9 USc. On the cross rates we have made a good gain against the Aussie to 92.1 AUc and are up at 60.3 euro cents. This puts the TWI-5 holding at 74.6. That means we are now just ½c below the exchange rate prior to the September 2017 election. In contrast, the bitcoin price is now at US$13,245 a fall of -US$1200 or -8.3% on the day. Regulator clampdowns in Asia are dampening speculation among the huge Asian millennial demographic that has been mad keen on cryptocurrencies. (Just to give you an idea of the different world that bitcoin inhabits, at the NZ September election is was trading at US$4,998.)

You can now see an animation of this chart. Click on it, or click here.